PublishedJune 18, 2014

House Judiciary Committee Approves Permanent Internet Tax Freedom Act

Washington – Today, the House Judiciary Committee approved H.R. 3086, the Permanent Internet Tax Freedom Act, by an overwhelmingly bipartisan 30-4 vote.  The bill would make permanent the moratorium on Internet access taxes and on multiple or discriminatory taxation of e-commerce.  Action on the bill faces a deadline of November 1, the date on which the moratorium expires, so this action by the Judiciary Committee is a timely one.  We look forward to swift approval on the House floor and in the Senate in order to avoid any last-minute chaos and uncertainty this fall.


First enacted through the original Internet Tax Freedom Act in 1998 (and extended with overwhelming support in 2001, 2004 and 2007), the Internet tax moratorium has contributed greatly to the growth of the Internet, and enabled it to become an integral part of the 21st century U.S. economy.  In his opening statement, Chairman Bob Goodlatte (R-Va.) called the Internet “the new frontier and medium of opportunity,” and compared the moratorium to the Homestead Act in having “created an unparalleled engine of upward mobility.”  Chairman Goodlatte also emphasized the urgency of making the moratorium permanent and avoiding a lapse.


During the markup, Ranking Member John Conyers (D-Mich.) and Rep. Sheila Jackson Lee (D-Texas) offered an amendment making the moratorium extension for four years rather than permanent, and reinstating the grandfathering provisions.  The amendment was defeated 12-21.  Two other amendments dealing with other issues of discriminatory taxation were withdrawn.


With the incredible innovation, productivity gains and commercial expansion it enables, Internet access can be said to be almost a prerequisite for participation in the 21st century economy.  Taxing Internet access would constitute a barrier to participation, making little economic sense.  It would undermine the promotion of Internet access, something committee members characterized as being in the national interest.  With 221 cosponsors for this bill, and 50 cosponsors for a companion Senate bill, a majority of lawmakers agree on the folly of what Rep. Darrell Issa (R-Calif.) characterized as taxing the goose that lays the golden egg.


While several committee members remarked on the need to address other aspects of Internet taxation, none sought to directly link them to consideration of H.R. 3086.  It was gratifying to see that there was such consensus on the need to extend the moratorium, and broad recognition that this was too essential a part of Internet policy to be risked by introducing extraneous factors.  We hope this prudence and thoughtfulness will be emulated in future deliberations on the House floor and in the Senate.

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